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ZHL to diversify revenue streams

BY MTHANDAZO NYONI ZIMRE Holdings Limited (ZHL), whose business portfolio includes insurance and property, seeks to further diversify its revenue streams and pursue opportunities for mergers and acquisitions to ensure a post COVID-19 recovery. In its latest trading update following the 22nd annual general meeting, a diversified investment holding company said it was implementing a number of strategies to ensure post COVID-19 recovery, sustainable business growth and business continuity. These include technology utilisation and optimisation to ensure the smooth flow of operations and service delivery as well as business survival strategies leveraging on financial strength and regional operations. The strategies also include capacitating operations for innovative business growth through competitive capital to increase resilience and equip them to absorb further market and economic shocks and consolidate market positions. “… aggressive investment strategy to augment revenues from core businesses; continued reconfiguration of the property portfolio to enhance rental income performance; diversifying revenue streams and pursuing opportunities for mergers and acquisitions; restoring and strengthening ZHL heartland investments,” the update reads. “… cost management accompanied by revenue enhancement measures, to ensure moderate profitability is achieved in 2020.” ZHL, however, said the impact of the COVID-19 pandemic on its performance was expected to be mild given the different responses to contain the disease and stimulate economic recovery in each country where the group has operations. The group said it started the year on a positive note with insurance revenue in the first quarter growing by 1 055% against the same period last year on a historical basis and 57% ahead of budget. Its revenue in the same quarter was 638% above last year and 30% above budget. Overall, all the strategic group business units traded positively in the first quarter with group comprehensive income at $72 million coming ahead of budget and 453% above last year. “The business growth momentum continued in the second quarter albeit at a slower pace and performance was largely in line with expectations despite the COVID-19 induced lockdowns and limited economic activity,” it said. “This was achieved mainly against the backdrop of business growth momentum in Malawi, positive recovery in Zambia and sustained growth and profitability at ZPI, and Emeritus Re Zimbabwe.” On domestic operations, Reinsurance and Reassurance Emeritus Re Zimbabwe continued to grow on account of increased treaty participation averaging 17% in 2020 from top tier cedants. Gross premium written as at 31 May 2020 at $$103 million (historical cost basis), was 24 % above the budget and 877% above actual performance for the same period in 2019. Despite the exchange rate distortions that fuelled increases in claims, the claims ratio of 37% achieved was within industry benchmark levels. In the period under review, Emeritus Life and Health Division achieved gross premium income of ZW$$15

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